The number of “problem banks” in the
US has hit its highest level since 1994, with 305 banks on the
Federal Deposit Insurance Corporation’s (FDIC) danger list at the
end of the first quarter, up from 252 in the previous quarter,
while total assets of problem institutions increased from $159
billion to $220 billion.
And in a gloomy prognosis, the FDIC said the
first quarter net income of the 8,200 banks which it insures
collapsed by more than 60 percent to $7.6 billion compared with
$19.3 billion in the same quarter last year, with around 20 percent
of the banks reporting no profit at all.
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“The first-quarter results are telling us the
banking industry still faces tremendous challenges and, going
forward, asset quality remains a major concern. Bank failures
continued to mount and they will continue to do so,” said FDIC
chairwoman Sheila Bair.
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